Ginnie Mae to shorten repooling time for reperforming loans

Ginnie Mae on Monday announced that it is preparing to halve the time issuers must wait to put reperforming loans back into securitized mortgage pools.

The government bond insurer, an arm of the Department of Housing and Urban Development, plans to cut the seasoning requirement to three months from six, and transition away from temporary rules around custom pooling for reperforming loans introduced during the pandemic.

"By the end of the first quarter of 2023, Ginnie Mae will be changing our policy and requirements for these reperforming loan pools, and making RG pooling optional," President Alanna McCargo said in remarks prepared for the Mortgage Bankers Association's annual conference taking place in Nashville this week.

McCargo also provided an updated figure for the total electronic notes in its digital collateral program, noting that it has climbed to $15 billion. At the end of August, it was $11 billion.

McCargo additionally noted that Ginnie is on track to complete its transition to the cloud on Tuesday as scheduled.

"When our planned business outage ends tomorrow, we will be fully operational," McCargo said.

Brad Finkelstein

She also reconfirmed Ginnie's commitment to its controversial risk-based capital rule for nonbanks. On Friday, the agency announced that it would give mortgage companies an additional year to comply with the new risk weighting, which is particularly high for mortgage servicing rights. 

"Our requirements, particularly the RBC element, has started an important conversation at a really critical time, and it's been a very healthy conversation for government lending and the system overall," McCargo said. "Ginnie intends to continue leading this conversation for the benefit of taxpayers, borrowers and market participants."

Ginnie recently added the rule as part of a broader set of updated requirements for its counterparties. The agency counts on approved mortgage companies to ensure payments from securitized loans backed by other government agencies get passed on to mortgage-backed securities investors.